Budget shortfall slows traffic plan

HCM City is in need of capital to improve its traffic system, upgrading and building new roads and bridges. — VNA/VNS Photo Hoang Hai

The plan, which outlines targets until 2020, was approved by the Government in 2007.

The plan aims to connect the city to major economic zones in the south and help ease traffic congestion.

It also targeted a higher amount allocated from the land fund for traffic infrastructure, up to 16 – 20 per cent of the total urban land in 2020, and 22 – 24 per cent in 2025.

The land fund for traffic now accounts for less than 10 per cent of the total urban land fund of the city.

Under the plan, the city needs about VND60,000 billion (US$2.85 billion) every year to develop traffic projects, according to the city's Department of Transport.

However, Gross Domestic Product (GDP) of the city is about VND420,000 billion ($20 billion), of which 70 per cent is contributed to the state budget, the department said.

Tran Quang Phuong, director of the HCM City's Department of Transport, said hundreds of small and large projects have not been developed because of lack of capital.

The key projects that lack capital include construction of belt roads in the eastern part of the city, which would help to reduce traffic congestion by gradually limiting or restricting travel by cars and container trucks into the inner city.

For example, a project to build Rach Chiec bridge on belt roads near the eastern side of the city needs VND500-600 billion ($23.8-28.5 million).

A road that connects Rach Chiec bridge to Binh Thai intersection also needs to be built, with investment of VND1,500 billion ($71.4 million).

In addition, a road connecting Binh Thai intersection with the Go Dua traffic circle requires investment of VND2,000 billion ($95.2 million) and the Thu Duc traffic circle upgrade needs VND1,500 billion.

Only by developing these projects could traffic flow be improved in the eastern part of the city, according to the transport department.

The city also needs to build a road linking Hoang Dieu Street in District 4 with Nguyen Van Linh Street in District 7, with an investment of VND2,000 billion, which will enhance traffic flow from the city centre to the south.

To have greater access to the southwestern region, the city needs to build a road connecting Binh Tien bridge to National Road 50, leading to Long An Province, and another road linking Vo Van Kiet Avenue to the HCM City – Trung Luong Expressway.

The city also requires capital to upgrade the existing Binh Trieu bridge to gain direct access to Binh Duong Province.

Many roads are in need of upgrading or building, but the city and the Transport Ministry do not have enough capital.

For instance, the project to connect Vo Van Kiet Avenue and the HCM City – Trung Luong Expressway was approved by both the city administration and the Ministry of Transport two years ago. But it has yet to begin because of insufficient capital.

Traffic congestion in the inner city has become more and more serious, but the four projects to build roads above ground level, with each costing VND10,000 billion ($476 million), are still under research. The city has sought capital for these projects for many years.

Only a few investors are willing to invest in such large projects.

Six metro routes under the city's long-term transport plan are expected to help reduce congestion on the roads, but only two metro routes are under development.

Each metro route costs billions of US dollars, and few investors have been willing to pour money into these projects.

HCM City is trying to mobilise capital and call for Official Development Assistance (ODA) for these projects, but the results are not promising, according to the department.

The city has applied various investment models such as BT (Build-Transfer), BOT (Build-Operate-Transfer) and PPP (Private Public Partnership) in many major traffic works.

These models were applied in construction of Phu My bridge, inter-provincial road 25B and a project to expand Ha Noi Highway.

Each model has its barriers, however, especially in the context of the economic slowdown in Viet Nam and the world.

The BOT model, which has been widely applied in many projects, is facing hurdles because the city does not want to ask its residents to pay too many tolls.

This model has also faced conflict with the Government's regulations on toll collection, which says that the minimum distance between toll stations should be at least 70 kilometres.

The BT model has also encountered problems because the city budget is limited, especially when the Government is trying to constrain the public investment.

As for the PPP model, which is only in a pilot phase, it is difficult to call for investment from state and private sectors because of the financial recession.

Thus, many sources of loans or other kinds of support are not available, or have been cut significantly.

With so many obstacles in its path, the master plan to improve road infrastructure in the city likely will not meet its schedule, according to Tran Quang Phuong, director of the city's Department of Transport. — VNS